UGL Limited (UGL)

Morningstar has downgraded
UGL
Limited from “accumulate" to “hold", as the diversified engineering, maintenance and facilities services firm announced it was conducting a review of its corporate structure.

Goldman Sachs will lead the review process and consider whether UGL should maintain its current structure, structurally separate or push further acquisitions. The research house says it was surprised by the announcement.

“We do see some sense in a separate listing for the property business as this is likely to trade on higher multiples give the more stable, recurring nature of its revenue streams. But at this stage we think it is too early, as we do not believe the businesses has yet built sufficient scale to challenge global market leaders."

Morningstar maintains its fair value price of $11.00. It forecasts earnings per share of 88.1¢ in fiscal 2013 and 86.4¢ in fiscal 2014. UGL achieved EPS of 96.6¢ in fiscal 2012.